Small victory for common sense as Chancellor drops “Taxations of Controlling Persons”

In the small print of today’s Autumn Statement was the news that the Government is not moving forward with the introduction of new rules on the taxation of controlling persons.

The rules were proposed following a review of public sector payroll in Whitehall earlier in the year, after it was revealed hundreds of civil servants were using limited companies to avoid tax.

Chief Secretary to the Treasury Danny Alexander proposed new rules that govern the financial arrangements of so-called “controlling persons” (i.e. those in positions of control within their organisation, such as Chief Executives or senior management). The Government has now decided that the incumbent rules, namely IR35, can do the job instead, and no extra legislation is needed.

So, in practical terms nothing has changed, but we’ve avoided the implementation of more complicated disguised employment legislation.